When it comes to exciting, high-growth tech stocks, the 2022 bear market has been one of the worst since the dot-com bubble of 2000 blew up. Indeed, rapid-fire rate hikes were the push that sent tech stocks off a hill. However, it isn’t just U.S. tech stocks that have endured damage through the year. Israel is home to a handful of intriguing innovators that took a left hook to the chin amid this grueling bear market. Website builder Wix.com (NASDAQ:WIX) and cybersecurity software CyberArk (NASDAQ:CYBR) are two of the most interesting Israeli software stocks that may have overshot to the downside amid tech’s tumble.
Wix: A Potential Leader in the No-Code Revolution
After such a violent tumble, Wix is now one of the top Israel-based tech stocks on my radar. The company provides a wide range of services to help everyday people get their own professional website up and running.
Undoubtedly, there is a slew of website builders out there. Many web hosts offer such services on the house. What separates Wix from the pack is the ease of use and just how stunning the websites look. It’s as though a programmer well-versed in languages such as HTML and CSS designed the site from scratch.
Wix’s site builder has come a long way over the years. A wide range of templates, tools, and the ability to easily customize via Wix’s “smart drag and drop” have made the platform a top choice for many digital retailers and bloggers.
With time, Wix’s platform will become more intuitive and feature-rich. Further, the top site-builders are one of many firms that could take a big bite in the work of front-end web developers and designers, as it equips non-technical users with a growing slate of cutting-edge tools. Wix and firms like it may very well be leading the charge in what could be a no-code revolution.
Though Wix has a top-notch product, there are a growing number of rivals in the website-building space. Web-hosting kingpin GoDaddy (NYSE:GDDY) is just one of the many firms doubling down on website-building tools. Hosting, domains, and site-building all go hand-in-hand, after all.
Despite the stiff competition, Wix is a company that seems best able to differentiate itself from the pack. With excellent managers and a greater focus on site-building tools (as opposed to generic web services like domain and hosting), the firm stands out from the pack and could take on most of a market that’s yet to jump to no- or low-code services.
Earlier this month, Wix teamed up with domain name registrar Name.com. Such a deal helps even the playing field with a diversified web play like GoDaddy without requiring Wix to invest considerable sums into lower-growth businesses like domain names.
More recently, Wix stock was on the receiving end of a few analyst upgrades. JPMorgan (NYSE:JPM) analyst Alexei Gogolev praised the site builders, noting an opportunity to “target” many sites that aren’t built via the top content management service providers. Citi and Needham also upgraded the stock’s price target by more than 10%.
Is WIX Stock a Buy, According to Analysts?
Turning to Wall Street, WIX stock comes in as a Moderate Buy based on nine Buys, four Holds, and one Sell rating assigned in the past three months. The average WIX price target of $98.14 implies 13.6% upside potential.
CyberArk: Defensive Growth Worth a High Price of Admission
Cybersecurity services are not an area that enterprises seek to cut costs with the continued rise in digital threats. Just because a recession looms doesn’t mean hackers will put their devices away. If anything, tougher times could cause more grey-hat (somewhat ethical) hackers to wear their (unethical) black hats.
CyberArk is a $6.2 billion Israel-based company that’s done a decent job of holding its own relative to its peers. The firm focuses on protecting the privileged accounts of clients it serves. Like most cybersecurity firms, CyberArk is more than capable of delivering robust growth under harsh economic environments.
Earlier this month, CyberArk caught a break, rallying by as much as 7% following a strong quarterly beat alongside an increase to its full-year guidance. Third-quarter earnings season was quite tough for many tech companies. CyberArk bucked the trend and may be in a spot to make new highs as the rest of the market feels the heat of a recession.
For 2022, the firm expects revenue to fall in the $592.5 million to $599.5 million range, a narrower range than the original $589 million to $601 million guide. Alongside the upbeat forecast was some pretty bullish commentary from CEO Udi Mokady. He remarked on “strong demand” for the “Identity Security platform,” also noting the high degree of “durability of demand for [its] solutions.”
Is CYBR Stock a Buy, According to Analysts?
Turning to Wall Street, CYBR stock comes in as a Moderate Buy based on nine Buys, four Holds, and one Sell rating assigned in the past three months. The average CYBR price target of $98.14 implies 19.6% upside potential.
Conclusion: WIX and CYBR are Worth Your Attention
Wix and CyberArk are fantastic Israeli tech companies worthy of U.S. investors’ attention. Although CyberArk stock is likely to be in for smoother sailing in a recession year, shares of CYBR remain far pricier than Wix at north of 10x sales. Sure, Wix may be economically sensitive. That said, with such a great platform, stronger long-term tailwinds likely to outlast macro headwinds, and a modest 3.7x sales multiple, I do view it as great value.